Ontario slaps 25% tax increase on electricity exports to US in response to Trump’s trade war
TORONTO — Ontario’s premier, the leader of Canada’s most populous province, announced that effective Monday it is charging 25% more for electricity to 1.5 million American homes and businesses in response to U.S. President Donald Trump’s trade war.
Ontario provides electricity to Minnesota, New York and Michigan.
“I will not hesitate to increase this charge. If the United States escalates, I will not hesitate to shut the electricity off completely,” Ontario Premier Doug Ford said at a news conference in Toronto.
“Believe me when I say I do not want to do this. I feel terrible for the American people who didn’t start this trade war. It’s one person who is responsible, it’s President Trump.”
Ford said Ontario’s tariff would remain in place despite the one-month reprieve from Trump, noting a one-month pause means nothing but more uncertainty. Quebec is also considering taking similar measures with electricity exports to the U.S.
Minnesota says it will
have a minimal impact
Minnesota receives only a small share of its electricity from Ontario, but Democratic Gov. Tim Walz was sharply critical of Trump’s actions that led to Monday’s announcement from Ford.
“The first victims of Trump’s Trade war? Minnesotans struggling to pay their skyrocketing electric bill,” Walz tweeted with a link to a story about Ontario’s move. “Minnesotans cannot afford Trump’s billionaire-run economy. We have to put a stop to this madness.”
But Minnesota Power, the main electrical utility serving the part of Minnesota that borders Ontario, gets only a “very small” proportion of its power from the province, company spokesperson Amy Rutledge said.
Minnesota Power bought only about $300,000 worth of electricity from Ontario last year, and only for four months out of the year. The utility serves over 150,000 customers, mostly with power it generates itself in Minnesota, she said. While it gets about 11% of its power supply from Manitoba Hydro, she said, that’s not affected by Ontario’s announcement.
“We really expect any impact on our customers to be negligible,” Rutledge said.
Midcontinent Independent System Operator — the organization that manages a regional power grid that stretches from Manitoba to Minnesota to Louisiana — also expects little effect, spokesman Brandon Morris said. MISO gets under half its power from Canada, and less than half of that comes from Ontario, he said.
Ford’s office said the new market rules require any generator selling electricity to the U.S. to add a 25% surcharge. Ontario’s government expects it to generate revenue of $300,000 Canadian dollars ($208,000) to $400,000 Canadian dollars ($277,000) per day, “which will be used to support Ontario workers, families and businesses.”
The new surcharge is in addition to the federal government’s initial $30 billion Canadian dollars ($21 billion) worth of retaliatory tariffs applied on items like American orange juice, peanut butter, coffee, appliances, footwear, cosmetics, motorcycles and certain pulp and paper products.